Which one of the following statements is false?
A)If the indifference curve is steep,the marginal rate of substitution is high.
B)A low marginal rate of substitution implies a relatively flat indifference curve.
C)A relatively flat indifference curve implies a consumer must receive a large amount of good X to compensate for a small decrease in good Y.
D)A high marginal rate of substitution implies a consumer must receive a large amount of good X to compensate for a small decrease in good Y.
E)A consumer's marginal rate of substitution decreases as she moves down along her indifference curve.

Question

Quizplus · Accepted Answer

The statement "A high marginal rate of substitution implies a consumer must receive a large amount of good X to compensate for a small decrease in good Y" is false. In reality, a high marginal rate of substitution implies that a consumer is willing to give up a lot of good Y to receive a small increase in good X. Therefore, the statement is reversed. The other statements are true.

Which One of the Following Statements Is False